Leveraging HR for Profitability

The idea of HR being leveraged to increase profitability may sound ludicrous to some, but let’s challenge that old way of thinking for a moment and consider how this can actually happen. It is true that Human Resources started as an industry meant to keep the peace between management and employees. HR was the policyholder, the company protector and the employee advocate. As regulations evolved, companies needed someone to help them stay compliant and employees needed someone to help them navigate employment relationships. In today’s world, such a reactive approach just won’t work. Today businesses are driven by people. We are not talking about just executives, but rather about the people who make the day-to-day operations happen.

Think about it. Employees are on the front lines every day interacting with current and potential customers. They represent the company. All those who encounter them see them as a reflection of leadership. The level of service, professionalism and proficiency that each employee portrays molds the customers’ perceptions of the entire company. When service is good, customers will return. When service is not good, customers will blame bad management for tolerating it. With the availability of social media, each customer’s experience can be shared with others. That means that even your customers can influence your ability to attract or retain customers. People are driving businesses and it’s up to HR to develop a strategy that leverages that influence for growth and profitability. The right strategy must engage employees to maximize skills that ultimately enhance customers’ experiences.

Here’s how to develop such an HR strategy:

Define what reputation you want to have with your customers. What do you want them to know you for and how do you want them to describe your company?

Use the same traits and values from your external marketing plan in step 1 to define what your internal culture looks like. Remember you don’t want conflicting messages. Build a consistent internal and external brand.

Look for people who value the culture you want. It’s easier to find someone who is motivated by your culture than it is to train someone to fake it. Choose wisely from the beginning and the motivation will take care of itself.

Equip your leaders. People want a fair, open, ethical work environment. Leaders need to have clear, fair expectations. They need to know how to relate to their people and how to handle mistakes.

Develop systems that retain top performers. Find out what your team values. You don’t want to lose top performers to a competitor so be sure you incentivize them to stay.Remember you can’t assume you know what their motivators are, it’s not always money.

Establish clear standards and consistently hold people accountable to those standards. Having the right policies, practices and procedures in place creates an understanding of the work environment and standards. People like to know where their boundaries are and what freedom they have. With juries perceiving a $2,000,000 award as being merely a slap on the wrist to employers, the importance of proactive accountability is undeniable.

There is no place in today’s business environment for a reactive business strategy. Proactive HR strategies that maximize people’s strengths and positively influence service will position your business for profitability and growth.